10. The amounts of individual assets that make up total assets, represented by accounts receivable,
inventories, equipment, and other assets, reflect a firm’s financing decisions, each measured at the
balance sheet date.
, 14. Current liabilities and shareholders’ equity are sources of funds where the supplier of
funds does not expect to receive them all back within the next year.
15. The current replacement cost of an asset is the amount a firm would have to pay to obtain another asset
with identical service potential; it is an entry value that reflects economic conditions at the
measurement date.
16. The same asset can have different measurements for tax purposes, for financial reporting purposes, and
for internal managerial decision-making purposes.
18. The managers of a business prepare financial statements to present meaningful information
about that business’s activities to external users.
ANS: T PTS: 1 DIF: 1 REF: p. 20 | p. 23
OBJ: LO: 1-03 NAT: BUSPROG: Analytic
STA: AICPA: FN-Reporting | ACBSP: APC-09-Financial Statements
KEY: Bloom's: Knowledge
19. The independent external auditors of a business prepare financial statements to present meaningful
information about that business’s activities to external users.
ANS: F PTS: 1 DIF: 1 REF: p. 20 | p. 23
OBJ: LO: 1-03 NAT: BUSPROG: Analytic
STA: AICPA: FN-Reporting | ACBSP: APC-09-Financial Statements
KEY: Bloom's: Knowledge
20. Management operates the productive capacity of the firm to generate earnings.
ANS: T PTS: 1 DIF: 1 REF: p. 20 | p. 23
OBJ: LO: 1-03 NAT: BUSPROG: Analytic
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